The Noida Extension Flat Owners Welfare Association (NEFOWA) ,a Noida based Welfare Association for homebuyers, have demanded that the Tribunal should set up a bench in Greater Noida to be more accessible to homebuyers, since the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has been functioning out of Lucknow for the last four months.

The members state that at least 30,000 complaints for various builder projects have been made from Noida and Greater Noida so far but the outreach of RERA to more buyers could only increase if the distance is bridged between the court and the buyers.

For each complaint, the hearing is being scheduled at least twice or thrice if not more. For the buyers who have complained, this entails that they visit Lucknow a many times the hearing is scheduled. Most hearings are during weekdays so people have to take leave from work to attend these. Because Noida and Greater Noida are construction heavy sites, at least a bench of the Tribunal should be located here.

RERA has been constituted to protect the interests of the buyers, so primarily it shouldn’t it be accessible? So far almost 80% RERA Complaints are being made from Noida and Greater Noida as these two cities have the highest concentration of new apartments.

Would the government’s decision to increase the home size for middle income group (MIG) under the credit linked subsidy scheme help in clearing unsold stock and reviving demand in the realty sector?

A day before, the Ministry of Housing and Urban Development approved increasing the carpet area in the MIG-I category of CLSS from the existing 90 square metre to up to 120 square metre and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square metre to up to 150 square metre. The changes are effective from January 1, 2017.

According to builders’ body National Real Estate Development Council (NAREDCO), this move would bring the entire demand for affordable housing under the interest subvention scheme, accounting for almost 96% of the total demand for housing in the country.

Confederation of Real Estate Developers’ Associations of India (CREDAI), another Developer’s body feels the average middle class in smaller towns and cities would now be able to afford bigger and better quality homes than before.

The increase in threshold limit would not only enable the middle income group buyers to avail interest rate subvention under CLSS, but also dilute the impact for the lower strata of the society with lower ticket size and that the subsidies might be more effective, if restricted to EWS/LIG segment in the interest of inclusive goal of housing for all.

Prime minister on December 31 last year had announced the CLSS under the Housing for All 2022 (Urban) for people belonging to the MIG category, valid till the end of December this year. However, the government last month extended the validity of interest subsidy benefit by 15 more months till March 2019.

According to a leading Real Estate Finance Company, the fence sitters specially, who were delaying their home purchase, would now be given a further push.

Builders, meanwhile, would not only enjoy the general uptick in the market that, but would also accelerate the sale of housing units which were earlier missing out on a sizeable portion of the Middle Income Group audience.

Would this decision of government beside helping in clearing unsold stock, also encourage developers to launch new projects?

Companies expect overall office space demand to decrease as technology brings in better utilisation of space and reduction in headcount, according to a survey by a leading commercial property consultant. However, they see demand for high quality office space to increase in the near future.

Technology is enabling a more mobile workforce and requiring companies to build more agility into their headcount planning. As better space utilization, and weaker front and back office headcount growth will reduce overall demand for office space, landlords must act now to ensure they remain competitive.

Real Estate Developers are, however, more confident about the outlook for office space demand, as they anticipate stronger aggregate demand driven by new startups and emerging industries.

Companies across the Asia Pacific region are placing employee experience at the center of major real estate decisions due to advances in technology, rather than relying on just good location, according to the survey.

According to the survey, whilst location would remain important, the changing order of real estate would require buildings and work spaces to be far more flexible and adaptable than before.

According to the report, it is expected that the headcounts in the information technology space would increase and more multinationals are likely use co-working spaces and incubation centers to improve their access to IT talent and innovative ideas.

Would this increase the value of the commercial properties? Would more developers opt for leasing rather than selling?

The Karnataka RERA, through its chairman has cautioned the builders and developers throughout the state that they would either have to register themselves mandatorily with RERA or face stringent action. There are approximately 1700 projects registered with the Karnataka RERA Authority, out of which 725 have been approved. The approval of 573 projects has been in progress and the remaining would get the nod after getting additional information. The Chairman also cautioned that the Authority would find out with help of other governmental agencies how many projects are to be registered and those who are unregistered would be severely penalised, to almost 10% of the project cost. The authority has so far received 218 complaints, from the buyers, most of which has been resolved. The authority, which is typically designed to be buyer friendly, is also willing to help the developer or the promoter in case of any issues to be sorted. Would the Developers register themselves or “face the music”?

Should the Realty Sector particularly the stamp duty be brought within the ambit of GST? According to the Associated Chamber of Commerce and Industry of India, the apex Industry Body, if the realty sector is brought within the ambit of GST it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction. Certain Industry experts feel that the inclusion of real estate in the Goods and Services Tax (GST) regime may prove to be a positive move for consumers who will gain from greater transparency, more regulation of the sector and possibly lower price on purchase of new property. Certain others feel that the inclusion of Realty Sector in GST regime, could curb the black money being largely circulated, since the realty sector majorly thrives of unaccounted money. According to certain other experts, Realty Sector witnesses the maximum amount of tax evasion and therefore has to be brought under the indirect taxation regime.

However, would this be a possibility, particularly when the Realty Sector is subject to state levy of taxes rather than the centre, more particularly when the cement is still subject to a levy of 28% GST?

Highway developers would now be rated by the Quality Control India (QCI) based on their performance. Their ratings, which will be dynamic, will be put in public domain.
The idea of giving this task to engage a third party is aimed at ensuring unbiased ratings of the highway builders and developers.

The rankings will be done primarily taking into account the milestones that developers reach for each work awarded to them. If they miss the targets despite having all the clearances and land availability, then their rankings will be low. The contractors can also update their details, which will be verified and will be reflected in the changed rankings.
These rankings will also set the ground for restricting National Highways Authority of India or any other central government agency under the ministry to award any fresh work until the companies improve their performance and achieve milestones.

This is being seen as a better solution than blanket blacklisting or barring highway developers from bidding in new projects.

A few projects awarded under build operate and transfer (BOT) are moving at a snail’s pace and these remain major concerns for NHAI and highways ministry. In the past three years, more projects have been awarded under Engineering Procurement Construction (EPC) model where government foots the entire bill and private players have no risk.

It came as a recent piece of news that the legislature was planning to churn out a legislation whereby they could bring in Real Estate under the Umbrella of GST. Have we ever wondered as to what prompted the Financial Minister to state so? According to him, the one sector in India where maximum amount of tax evasion and cash generation takes place is the real estate, which is still outside GST, therefore there is a strong case to bring real estate into GST. How far is this feasible? So far as the realty sector is concerned, under-construction properties are taxed at 12% apart from the Stamp Duty from 4 to 8% and registration charges, and property tax (annual municipal levy) on a property. Before the advent of GST, service tax was applicable at 4.5% on under-construction properties. However, no credit of tax paid on goods namely on VAT and excise duty was allowed to developers. For a completed property, GST is currently not applicable. Apart from the above, the computation of revised sale price is a complex as well as time-consuming task. Developers have to depend upon their contractors to know the VAT and excise duty incidence and have to wait for the project to complete before they know how much price reduction can be done finally. While the incidence would depend upon the type of project, estimates suggest that price reduction, even if done on estimated basis, is unlikely to be sufficient to bridge the gap between GST at 12% and service tax at 4.5%. However, the buyers of under-construction properties to re-negotiate with their developers on how much less amount they will have to pay in the wake of ITC (Input Tax Credit). This means that whatever construction takes place post-GST, the developer can claim ITC which can be passed on to the consumer. But with the imposition of GST on under constructed properties, aren’t the homebuyers reeling towards buying a ready to move in homes as compared to the under constructed ones?
From a consumer’s viewpoint, paying GST and stamp duty for an under-construction property leads to an overall tax outgo of 17-18%, however, a ready-to-move-in project, a consumer would only have to shell out on stamp duty. The Developers would not be able to claim input credit and it would become a cost to them. Consumers who have invested into projects that are almost complete will face the brunt of the new policy on the amount to be paid under GST. As a large part of the construction of their project is over beyond one year, their developer will not be able to claim input credit. Although the government has allowed past one-year to claim credit, a majority of them either have not maintained the requisite documents such as invoices or have incurred the taxes beyond past one year. Wouldn’t complying with the anti-profiteering provision be a huge task? While this is a good principle that can be applied in case of tax saving, if the same is mixed with change in the procurement cost it goes into a grey area. Will it be applied on a project basis, state basis or pan-India basis? Will there be any index for reference?
There is a growing clamour from a large number of states to bring real estate fully under GST. This means that GST should be charged on the sale of completed buildings. Shouldn’t the government either substantially reduce stamp duty or eliminate it so as to not double tax the consumer?

A recent study report of CREDAI, the real estate Developer’s body, revealed that the supply of affordable houses has increased by 27%. What is the factor that contributed towards this sector of housing? The answer is that the initiatives of the government, to boost its flagship programme, has lured many developers to offer its services to lower income and middle income group. Among the new launches, the Mumbai topped the list with a whopping 40% increase in housing supply, followed by Kolkatta and Pune. Mumbai witnessed the highest number of launches, at over 19400 new residential houses until September 2017, out of which affordable housing sector had a share of close to 10000 units registering a rise of 300%, when compared to the previous year. What is the reason for this enhanced growth rate in the affordable housing sector? The key to this is that the implementation of RERA and GST has boosted the confidence of home-buyers, who were swinging in a dilemma to buy a house. The enhanced confidence resulted in many enquiries for the right kind of properties in which witnessed good traction during the current festive season. So would we see more developers investing in this sector?

Thousands of residents living in the new sectors will continue to face connectivity issues, say developers with projects in the new sectors, if a policy intervention addressing issues delaying construction of 24m-wide roads in these sectors (58-118) isn’t taken soon.

According to Master Plan 2031, the 24m approach roads to projects are to be built by the developer/landowner in whose licensed area the road is proposed. However, in many cases, these roads never see light of day as one or more landowners refuse to part with their portions of land for roads.

Multiplicity of ownership causes a major problem in connectivity in new sectors. For instance, in Sector 62, the 24m approach road passes through projects of three developers. Since they are still being built, the developers have not worked on the 24m road, impacting connectivity to other projects in the area.

What is delaying development of sector roads in Gurgoan? Can the developers and state authorities work together for the sake of infrastructure building which would not only benefit those who have already bought into projects in these areas, but also attract new customers?

Mahindra Lifespaces Developers, the real estate and infrastructure development arm of the Mahindra Group, has introduced a new brand of industrial clusters located across India.

Under the new brand ‘ORIGINS by Mahindra World City’, the company’s first two projects will come up in North Chennai and Ahmedabad, with an estimated investment of Rs 600 crores.

The first phase of proposed North Chennai project will have 264 acre development and this is a joint venture between Mahindra World City Developers and Japan’s Sumitomo Corporation. Total size of this project will be 500 acres.

The second project is located near Ahmedabad, with a phase 1 development of 268 acres, and is being developed along with International Finance Corporation (IFC) as a strategic partner. The project’s total size will be up to 350 acre.

Together, these industrial clusters are expected to create direct employment for around 20000 persons and will target companies across the engineering, medical equipment, food processing and logistics sectors, amongst others, Mahindra Lifespaces said in a release.

ORIGINS by Mahindra World City will comprise of industrial clusters spanning 250 – 600 acres, and located in high growth corridors across India. These industrial clusters will enable faster go-to-market for both domestic and global companies by way of clear land titles; plug-and-play infrastructure; in-house expertise in operations and security; and a range of business support services such as warehousing, logistics, banks, food courts, etc.

Mahindra World City’s developments in Chennai and Jaipur together span nearly 4500 acres; house 150 global and domestic companies that have created direct employment for over 45,000 persons; have generated exports exceeding $ 1.75 billion annually, the company added.

With India expected to emerge among the top five manufacturing countries globally, sustainable and future-ready business ecosystems will act as a game-changer for inclusive growth, job creation and productivity enhancement. ORIGINS by Mahindra World City embodies the Mahindra Group’s vision to create world-class urban infrastructure in India.